People should certainly be doing all they can to reduce their "carbon footprint" (drive minimally, and when you do, drive a car with good MPG and low emissions; upgrade your house/business for efficiency, etc.). But in developed countries, our lifestyles are inherently some of the most polluting on the planet, and most of us, for example, have to heat our homes somehow, and may have to burn coal or natural gas to do it. So what else can you do? Pay a "tax" for your pollution, in the case of the University of Utah's agreement with Pax Natura, by preserving forests in a less-developed country (forests are "carbon sinks," i.e., they absorb carbon from the atmosphere) so you break even -- you negate your pollution by paying to preserve trees and make sure carbon is absorbed. You could accomplish this carbon negation a number of ways. But helping prevent deforestation in the world's tropical rainforests, sometimes called "the lungs of the world" (and home to countless species, and who knows what yet-undiscovered medicines) is an extremely effective and valuable way of becoming "carbon neutral." Burning of rainforests themselves (for subsistence, ranching, etc.) is itself a large contributor to the world's overproduction of CO2, so preserving them is valuable two or threefold.
Right now, this type of "carbon credit" effort is mostly voluntary. But there are proposals to make this type of system more built-in, both for individual consumers and, more importantly, as a way for more-polluting industries to make up for that fact to meet overall global goals for reducing carbon emissions (e.g., a factory that was able to retrofit to exceed EPA standards for emissions might be able to sell credits to a factory unable to do so). This is a very likely scenario for the future, as our need to limit greenhouse gases becomes more apparent and urgent.